Small Business Owners with Personal Credit Ratings 1 to 3 Also Eligible for 'COVID-19 Loans'

[Asia Economy Reporter Hwang Yoon-joo] On the 8th, the Financial Services Commission announced that the target for small business loans at commercial banks includes individuals with personal credit ratings of 1 to 3 provided by credit rating agencies such as NICE Information Service.

In a press release on the same day, the FSC stated, "Even if the bank's internal credit rating is not between 1 and 3, banks have been instructed to support secondary interest subsidy loans to small business owners who have received personal credit ratings of 1 to 3 from credit rating agencies."

Since the 1st of this month, the government has been actively supporting management fund loans for small business owners struggling due to the COVID-19 pandemic.

Support is divided among the Small Enterprise and Market Service (for low credit borrowers), Industrial Bank of Korea (for medium credit borrowers), and commercial banks (for high credit borrowers).

However, there have been concerns about confusion among small business owners due to discrepancies between the personal credit ratings checked directly by individuals through NICE Information Service and the internal credit ratings actually used by banks for loans. Even if the credit rating from the credit rating agency is between 1 and 3, loans are not granted if the bank's own rating (1 to 3) is not met.

In response, the FSC clarified that small business owners with personal credit ratings of 1 to 3 can also receive loans from commercial banks, and this has been applied starting today.

The FSC also explained that from the 1st to the 6th of this month, commercial banks received 29,000 loan applications. The Industrial Bank of Korea received 57,000 applications.